There continues to be a seemingly never-ending stream of cases which confirm the perils of assuming that an employer’s liability for reasonable notice of termination will be capped at one month per year of employment.
Employee salaries and benefits can be some of the greatest costs borne by a business. As a result, when a company faces financial hardship, they will often terminate positions to reduce their costs.
In the absence of an employment agreement that expressly sets out a notice period upon termination, employees who are terminated without just cause are entitled to a notice period or pay in lieu of notice from their employers in accordance with the common law.
In the recent unreported decision of the New Brunswick Police Commission and Constable Jeff Smiley, dated December 2, 2015, an arbitrator appointed under the New Brunswick Police Act imposed the penalty of dismissal of a New Brunswick police officer as a result of his misconduct.
The British Columbia Court of Appeal (the “BCCA”), in Frederickson v Newtech Dental Laboratory Inc., 2015 BCCA 357, overturned the trial judge’s finding that Frederickson had failed to mitigate her damages because she refused to accept an offer of re-employment from her employer, Newtech Dental Laboratory (“Newtech”).
The dismissal of a long-term employee who is entitled to common law reasonable notice can result in significant liability for an employer. As the determination of the appropriate notice period is contextual, it can be difficult for an employer to accurately assess their potential liability.
In Evans v Avalon Ford (1996) Limited, 2015 NLTD(G) 100, the employee, Mr. Evans, was Fleet Manager at the Avalon Ford auto dealership, the largest Ford dealership in Atlantic Canada (the “Dealership”), for more than 12 years. On the morning of Thursday, June 10, 2010, a meeting was called by Mr. Wilkins, the Dealership’s owner to discuss an error regarding the delivery of a commercial vehicle without appropriate paperwork being completed.
We have written a number of times regarding cases that significantly depart from the so-called one month per year of service rule of thumb. Yet another case has illustrated the risk an employer runs in assuming their liability will be capped at one month per year of service.
A recent post cautioned employers to beware of using the one month per year of service “rule of thumb”. The Ontario Superior Court of Justice has once again affirmed that, depending on the circumstances, courts are willing to award short service employees significantly more than one month per year of service.
One of the questions at the forefront of many employers’ minds when they are considering terminating an employee without cause is how much it is going to cost. Unless there is a written employment contract with an express termination clause, an employer’s obligation is to provide reasonable notice of termination.